OK I'm normally not this tech-illiterate, but can someone explain how this whole sim-card thing works? I was planning on bringing my iPhone with the appropriate AT&T international plan, like I do for Europe. Bad idea?

What is iPhone coverage like in India? I'll be in Delhi, Agra, Chennai, Cochi and Kerala backwaters (I don't expect coverage there).

What's the deal with the sim card vs using my regular iPhone (+ Skype when I can)?